Westpac blames loan demand for job cuts

Westpac senior executive Peter Hanlon, left, pictured with CEO Gail Kelly, said: “We have to transform our business to meet the state of the economy today and as we see it for the near future.”
Photo: Sasha Woolley

Westpac Banking Corp senior executive Peter Hanlon says weak demand for loans and a cost-cutting exercise designed to reduce job duplication are to blame for its decision to slash 560 positions.

Westpac staff were briefed on Thursday about the planned redundancy program, which will predominantly affect technology, mortgage processing and head office roles.

“We have to transform our business to meet the state of the economy today and as we see it for the near future," Mr Hanlon told The Australian Financial Review.

“We don’t see in the near to medium term a pick-up in housing or business credit growth."

While 560 positions will be axed, Mr Hanlon said the bank estimated about one-third of that number would be redeployed and the number of staff affected by forced redundancies would be between 300 and 400.

Finance Sector Union national secretary Leon Carter said 150 lending operations roles were being sent offshore to India.

“If a successful, big iconic company like that can’t keep Australian jobs then what the hell’s going on?" Mr Carter said.

“It continues Westpac’s continued short-term decision making on offshoring."

Prime Minister Julia Gillard on Thursday said the financial services sector in Australia had a bright future despite the latest Westpac cuts.

She would not comment specifically on that situation, but said the government would support those who lost jobs and help them find new opportunities.

Ms Gillard said the growing middle class in China, India and other countries in the region would ensure a strong future for financial services.

“That burgeoning new middle class will want sophisticated financial services that can be provided by us right here in Australia," she told reporters in Melbourne on Thursday.

The FSU’s Mr Carter slammed Westpac and its institutional shareholders for being greedy.

“What more does a company need to do to keep jobs than make a multibillion-dollar annual profit and grow market share," he said.

“At the end of the day, banks in this country are being run to make the rich institutional shareholders happy at the expense of the worker."

He was also cynical about the redployment plans.

“They hope to redeploy 30 per cent as do we, but there’s no guarantee that will be the case," Mr Carter said.

An ANZ analysis of Australian Bureau of Statistics data indicates 35,000 business services jobs, including in IT, finance and administration, were dumped in the September quarter, and a UBS study shows about 7000 positions in finance are likely to be lost in the next two years.